The rupee rose for the third straight session today appreciating further by 18 paise to close at the one-week high of 48.97/98 against the US currency on strong equities and sustained dollar selling by exporter. Sluggish dollar overseas amid fresh capital inflows too helped the rupee surge,a dealer said.

Sustained dollar selling by exporters and some banks on expectations of further fall in dollar overseas on allaying fears of euro-zone crisis helped the rupee.

At the Interbank Foreign Exchange (Forex) market,the domestic unit opened higher at 49.05/06 a dollar from last weekend’s close of 49.15/16 and immediately touched a day’s low of 49.14 in line with weak equities.

However,it bounced back and rallied to a high of 48.90 before settling at 48.97/98,showing a rise of 0.37 per cent. The BSE benchmark Sensex spurted by 324.69 points or 2.00 per cent today,mainly supporting the rupee.

“Indian Rupee appreciated by almost 0.4 per cent against the Dollar,as local equities closed up by two per cent. Globally Dollar also weakened against major currencies mainly against EURO which helped Rupee to perform,” Pramit Brahmbhatt,CEO,Aplari Financial Services (India) said. “Next support for the USD INR pair is at 48.75 and the trading range for the USD/INR will be 48.70 to 49.60 tomorrow,” he added.

The dollar index,a gauge of six major currencies,was down by over 1 per cent while New York crude oil was trading above $84 a barrel in European market today. FIIs turned net buyers after five days of sell-off and pumped in $99.98 million on October 6,as per Sebi data.

“The concern over eurozone is still a major worry for the global economy. The euro rallied one per cent versus the dollar,similarly other riskier currencies rallied as risk appetite was boosted by promises from French and German leaders to make plans to protect the eurozone banks,” Abhishek Goenka,CEO,India Forex Advisors said. The Reserve Bank of India fixed the reference rate for the US dollar at Rs 49.0710 and for the Euro at Rs 66.1670.

The rupee premium for the forward dollar too rose further on sustained paying pressure from banks and corporates. The benchmark six-month forward dollar premium payable in March finished higher at 85-87 paise from last Friday’s close of 77-79-1/2 paise and far-forward contracts maturing in September too ended strong at 121-123 paise from 108-110-1/2 paise previously.

The rupee recovered against the pound sterling to finish at 76.62/64 from last weekend’s close of Rs 76.37/39 and also rebounded to Rs 66.54/56 per euro from Rs 66.06/08 previously. It,however,remained firm against the Japanese yen to end at Rs 64.84/86 per 100 yen from last close of Rs 64.36/38.